Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions

Touch N' Go
, the DeskTop In-and-Out Board makes your office run smoother.


You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Borgen v. A&M Motors, Inc. (3/30/2012) sp-6657

Borgen v. A&M Motors, Inc. (3/30/2012) sp-6657

        Notice: This opinion is subject to correction before publication in the PACIFIC  REPORTER . 

        Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 

        303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  


ROBERT R. BORGEN,                               ) 

                                                )       Supreme Court No. S-14073 

                  Appellant,                    ) 

                                                )       Superior Court No. 3AN-07-09348 CI 

        v.                                      ) 

                                                )       O P I N I O N 

A&M MOTORS, INC., an Alaska                     ) 

Corporation, MIKE MORELLI, a                    )      No. 6657 - March 30, 2012 

Natural Person, and CREDIT                      ) 

UNION 1,                                        ) 


                  Appellees.                    ) 


                Appeal from the Superior Court of the State of Alaska, Third 

                Judicial District, Anchorage, Mark Rindner, Judge. 

                Appearances:        Robert   C.   Erwin,   Robert   C.   Erwin,   LLC, 

                Anchorage, and LeRoy E. DeVeaux, DeVeaux & Associates, 

                Anchorage,       for  Appellant.      Linda     J.  Johnson,    Clapp, 

                Peterson,      Tiemessen,      Thorsness       &    Johnson,      LLC, 

                Anchorage,      for  Appellees     A&M     Motors,    Inc.  and   Mike 

                Morelli.   No appearance by Appellee Credit Union 1. 

                Before:     Carpeneti,     Chief   Justice,  Winfree,    Justice,   and 

                Matthews,   Senior   Justice.*     [Fabe,   Christen,   and   Stowers, 

                Justices, not participating.] 

                MATTHEWS, Senior Justice. 

        *       Sitting by assignment made pursuant to article IV, section 11 of the Alaska 

Constitution and Alaska Administrative Rule 23(a). 

----------------------- Page 2-----------------------

               The main issue presented in this case is whether under the Unfair Trade 

Practices and Consumer Protection Act a misrepresentation by a seller of the model year 

of a used motor home is subject to a defense that the misrepresentation was made in good 

faith.  We   answer   in   the   negative   because   the   Act   clearly   implies   that   unknowing 

affirmative misrepresentations of material facts will give rise to liability, and substantial 

authority from other jurisdictions that have similar statutes confirms this view. 


               Robert Borgen bought a used Travelaire motor home from A&M Motors, 

Inc. in September 2004.1       The motor home had previously been owned by Thom and 

Linda Janidlo; Thom Janidlo traded in the vehicle to A&M Motors about two weeks 

before Borgen bought it.      When Janidlo traded in the motor home, he indicated that it 

was a 2002 model.       At some point, someone changed the model year to 2003 on the 

documents at A&M Motors. 

               The title from the State of Alaska showed that the motor home was a 2003 

model, but the vehicle identification number (VIN) indicated that the motor home was 

a 2002 model.     Motor homes have two VINs, one on the chassis and one on the coach. 

Both trial experts testified that the tenth digit of a VIN of a chassis indicates the model 

year of the chassis, but their testimony as to whether the same holds true for the VIN of 

a coach was unclear.      The VIN on the chassis is the VIN on the vehicle's title, but a 

motor home's model year is determined by the model year of the coach.  In this case, the 

tenth digit of both VINs was a 2.       According to Edward Palmer, an executive of A&M 

Motors, A&M Motors checked the coach VIN of used motor homes it bought for resale. 

A&M Motors sold the Travelaire to Borgen as a 2003 model. 

        1      Borgen's girlfriend at the time, Michelle Crain, was a co-purchaser, but her 

name was removed from the title in 2005, after the couple separated.  She was not a party 

to the lawsuit. 

                                                -2-                                             6657 

----------------------- Page 3-----------------------

               Borgen negotiated the purchase with Geno Hensley, a salesman Borgen 

knew     socially.   According     to  the  Authorized     Additions,   Removal,     and   Repairs 

Agreement prepared by A&M Motors when it sold the motor home to Borgen, Mike 

Morelli was the sales manager for the transaction.  Borgen did not remember having any 

direct contact with Morelli during the negotiations or purchase. 

               When Borgen purchased the Travelaire, he traded in his own used motor 

home and received a $6,000 used-vehicle allowance.  After credit for the down payment 

and for the trade-in value of his used motor home, Borgen owed $46,491.14 on the 

Travelaire.  A&M Motors helped arrange financing; Credit Union 1 loaned Borgen the 

money for the motor home. 

               In August 2005 Borgen discovered documents in the motor home indicating 

the motor home was actually a 2002 model.           He contacted A&M Motors to complain; 

the only compensation they offered him was a $1,000 service contract. 

               Borgen became the sole owner of the motor home in 2005; at that time he 

refinanced the motor home in his name only.          At some point Credit Union 1 asked the 

State of Alaska Division of Motor Vehicles (DMV) to research the title, and DMV 

changed the title to reflect that the motor home was a 2002 model. 

               Borgen   sued   A&M   Motors,   Hensley,   and   Morelli.     Borgen   pled   three 

causes of action: (1) misrepresentation, (2) violation of the Unfair Trade Practices and 

Consumer Protection Act (UTPA), and (3) breach of contract.                All three defendants 

answered   and   raised   affirmative   defenses.   At   first   Morelli   and   A&M   Motors   had 

separate attorneys, but in early May 2008 Morelli's attorneys began to represent A&M 

Motors as well. 

               Borgen moved for summary judgment on his UTPA claim in February 

2008.   Borgen principally relied on a North Carolina case in which the court found a 

violation of North Carolina's consumer protection statute when a dealer misrepresented 

                                                -3-                                          6657

----------------------- Page 4-----------------------

the model year of a car.2      The defendants filed a joint opposition, arguing that there were 

material factual disputes that precluded summary judgment. They also asserted that they 

were entitled to rely on the vehicle title, which showed that the motor home was a 2003 

model,   when      they   sold   it   as  a  2003  model.    In   reply   Borgen     contended     that   the 

defendants were not entitled to rely on the title because Janidlo told them it was a 2002 


                 The defendants filed a joint motion for summary judgment in May 2008. 

They argued, among other things, that neither Hensley nor Morelli could be liable for 

any alleged breach of contract, as the contract was between A&M Motors and Borgen. 

                 In a written decision dated December 24, 2008, the superior court granted 

summary judgment to Hensley and Morelli on the breach of contract claim. But it denied 

summary judgment to the parties on all of the other claims, finding that material issues 

of   fact   prevented   entry   of   summary   judgment.        In   its   decision,   the   superior   court 

interpreted this court's opinion in Kenai Chrysler Center, Inc. v. Denison3  to mean that 

a mistaken but good-faith belief cannot be the basis of a UTPA claim. The superior court 

concluded   that  Kenai   Chrysler 's   good-faith-defense   language   was   a   distinguishing 

feature that made the North Carolina case relied upon by Borgen inapplicable: 

                         Mr.   Borgen   also   relies   on   a   North   Carolina   case   in 

                 which a 1983 car was sold as a 1982. . . .            In that case, the 

                 court said that defending the sale on the grounds that it was 

                 a   mistake   had   no   legal   basis. Myers   v.   Liberty   Lincoln- 

                Mercury,   Inc. ,   89   N.C.   App.   335,   336-37   (N.C.   Ct.   App. 

                 1988).       It  was    "enough      that  the   goods     bought    were 

                 misrepresented." Id . at 337.  This case is at odds with Alaska 

                 law,   under   which   the   assertion   of   a   good-faith,   mistaken 

        2       Myers v. Liberty Lincoln-Mercury, Inc. , 365 S.E.2d 663 (N.C. App. 1988). 

        3        167 P.3d 1240 (Alaska 2007). 

                                                    -4-                                                 6657 

----------------------- Page 5-----------------------

                belief   cannot   be   the   basis   of   a   UTPA   claim. See  Kenai 

                Chrysler Center, 167 P.3d at 1256. 

                The case proceeded to trial against A&M Motors and Morelli in August 

2010.4   Borgen testified and presented testimony from Thom Janidlo and an expert, Chad 

Oyster.    A&M Motors had three witnesses:              Edward Palmer, an executive of A&M 

Motors; Peter Dunlap, the defense expert; and Shelly Mellott, a DMV employee. 

                Borgen testified about the purchase of the Travelaire and his discovery of 

documents showing that it was a 2002 model rather than a 2003 model.  The documents 

he found were a new vehicle information statement, showing that both the coach and the 

chassis were 2002 models, and a distribution order, showing a manufacturing date of 

May 6, 2002.       Borgen highlighted the changes from 2002 to 2003 that had been made 

to documents from A&M Motors.  Borgen testified that he had never met Morelli before 

he sued him and had not talked to him during the purchase of the motor home. 

                  Oyster, who worked for a different RV dealership, was qualified as an 

expert in RV sales and the evaluation of RVs for pricing purposes. He testified generally 

about the duties of a sales manager at an RV dealership, indicating that a sales manager 

"usually" is "the last word" in "negotiations for the purchase or sale of motor homes." 

He   also   testified   that   sales   managers   "evaluate   motor   homes,   trade-ins,   help   select 

inventory" and "pretty much run the sales department."              Oyster thought that in general 

it was reasonable for a dealer to rely on the vehicle's title to determine the model year, 

but he said if the owner of a used RV reported that the model year was different from the 

year on the title, he would investigate it further.  Oyster testified that he had reviewed the 

manufacturer's statement of origin (MSO) for Borgen's Travelaire, and it showed that 

        4       Borgen dismissed Hensley from the suit in March 2009. 

                                                  -5-                                               6657 

----------------------- Page 6-----------------------

the motor home was a 2002 model.5            He agreed that the MSO is not available to a dealer 

when taking a trade-in. He said that the model year of a vehicle can be determined from 

the VIN because the tenth digit of the VIN shows the model year.                       In response to a 

juror's question about whether the model year could be determined from the coach VIN, 

Oyster answered that this might be possible, but he had not tried to determine the model 

year from the coach VIN in this case because he had seen the MSO.                     Oyster estimated 

that the difference in value between a 2002 and a 2003 model was between $5,000 and 

$10,000, but he said that he did not know whether Borgen overpaid for the Travelaire. 

                 Janidlo   testified   that   he   thought   the   Travelaire   was   a   2002   model,   as 

indicated   in   the   service   agreement   he   signed   when   he   bought   the   motor   home.    He 

identified or discussed several documents related to his trade-in of the Travelaire. The 

initial trade-in evaluation from A&M Motors said that it was a 2002 model, but the 

model year had been changed to 2003 on a later document; Janidlo testified that he did 

not make the change or authorize it.  Janidlo said that he did not make other changes in 

the documents from 2002 to 2003; he also said that the "2002" on the original trade-in 

evaluation   was   not   in   his   handwriting.     He   indicated   that   Traveling   Treasures,   the 

company from which he bought the Travelaire, filled out the papers for the original title 

and he signed them.       He was unaware that the title had the wrong model year on it and 

was always under the impression that the motor home was a 2002 model. 

                 At the end of Borgen's case-in-chief, A&M Motors and Morelli asked for 

directed verdicts.      The court granted Morelli's motion for a directed verdict because it 

decided   that   no   evidence   had   been   introduced   from   which   a   reasonable   juror   could 

        5        When   a   vehicle   is   new,   the   manufacturer   issues   a   document   called   a 

manufacturer's statement of origin (MSO) or a certificate of origin, which shows                      the 

model years and the VINs of both the coach and the chassis.                The MSO is submitted to 

the state when the vehicle is registered for the first time; the state retains the MSO. 

                                                   -6-                                                6657 

----------------------- Page 7-----------------------

conclude that Morelli made any misrepresentations to Borgen or had done anything that 

would amount to a UTPA violation.  The court also granted the defendants' motion for 

a directed verdict on the punitive damages claim, finding that Borgen failed to present 

adequate evidence of outrageous conduct.  The court denied A&M Motors's motion for 

a directed verdict because it decided that Borgen had introduced enough evidence for the 

jury to consider A&M Motors's intent. 

                Palmer of A&M Motors testified that the seller of a used motor home does 

not ordinarily have an MSO to show the model year; it only has the title from the state. 

A&M Motors introduced its valuation of the motor home when Janidlo traded it in; 

Palmer testified that A&M Motors actually paid Janidlo the value of a 2003 model.  He 

said   it   was   A&M   Motors's   practice   to   check   the   coach   VIN   of   the   motor   homes   it 

purchased for resale, but he also said that it relied on the title rather than the VIN for the 

model year.       Palmer testified that A&M Motors had received titles with mistakes on 

them, specifically an incorrect VIN, but that it could not check the titles of all used motor 


                Mellott testified that she was the office manager for the Anchorage DMV 

offices.   She explained how DMV issues a vehicle title; she said that in this case, it 

appeared that "whoever processed the title looked at the application instead of the actual 

official [certificate of origin]" and that the original certificate said the vehicle was a 2002 

model.  Mellott said that A&M Motors should have been able to rely on the title, but she 

also said if A&M Motors had information that the title was incorrect, it could research 

the title.  She estimated that it would take just a few minutes to research a newer vehicle 


                Dunlap, a former employee of A&M Motors, testified as an expert for 

A&M Motors.  Dunlap described the trade-in process at A&M Motors in detail.  Dunlap 

testified that A&M Motors would not look for an MSO or certificate of origin when 

                                                   -7-                                            6657

----------------------- Page 8-----------------------

taking a trade-in because the original documents are either with the state where the motor 

home was first registered or with the manufacturer.  Dunlap also testified that the model 

year   can   be   determined   by   looking   at   the   tenth   digit   of   the   VIN;   he   said   that   the 

employee taking in a used motor home should check the VIN, but he did not specify 

which VIN.   He said that the dealer would be able to rely on the title even if the customer 

selling the used motor home said that the model year was different from the year on the 

title because customers can be "misinformed or vague or unsure or wrong about a variety 

of different things related to their trade-in vehicle."         He thought it was reasonable for 

A&M Motors to rely on the title.  Dunlap could not say whether Borgen overpaid for the 

Travelaire; he thought Borgen had   received more credit for his trade-in than it was 

worth.    He testified that the changes to the documents probably happened after A&M 

Motors   employees   noticed   that   the   model   year   on   the   title   was   different   from   what 

Janidlo told them. 

                At the close of all the evidence Borgen moved for a directed verdict and 

A&M renewed its motion for a directed verdict.  The court denied both motions stating: 

                        I believe that a reasonable jury will have to determine 

                the intent, motivation and circumstances of what happened 

                here and may decide that it was all an innocent mistake and 

                that there were no misrepresentations and no violation of the 

                UTPA.  And they could decide that there [was] a violation of 

                the UTPA and that there was a misrepresentation. 

                The parties submitted proposed jury instructions before trial; A&M Motors 

submitted a proposed special verdict form.             Both parties filed objections to the other 

side's proposed instructions.       The biggest dispute over jury instructions was related to 

the UTPA instructions.        Borgen proposed an instruction that would have required the 

jury to find that A&M Motors had committed a UTPA violation if the jury found that 

A&M Motors misrepresented the model year of the motor home. After the evidence was 

                                                   -8-                                            6657

----------------------- Page 9-----------------------

presented, Borgen asked the court to instruct the jury that the seller could commit an 

unfair trade practice by failing to investigate the validity of a title after learning of a 

potential problem with the title; as authority for this instruction, he relied on a Georgia 

case this court cited in Kenai Chrysler Center, Inc. v. Denison .6               The superior court 

declined to give Borgen's UTPA instructions; instead, it used A&M Motors's proposed 

UTPA instructions, including one which allowed as a defense a good-faith but mistaken 

belief in the truth of a representation.       The instruction also left it to the jury to decide 

whether A&M Motors was entitled to rely on the vehicle title.                 The jury was given a 

special verdict form with five questions. 

                The   jury   decided   that   A&M   Motors   had   not   engaged   in   an   unfair   or 

deceptive   act   in   its   dealings   with   Borgen. It   then   decided   that   A&M   Motors   had 

misrepresented the model year, that it knew or should have known that the statement was 

false or misleading, and that the misrepresentation was a legal cause of harm to Borgen. 

It found that A&M Motors had not breached its contract with Borgen.                     It found that 

Borgen suffered $3,097.50 in damages.7 

        6       167 P.3d at 1256 (citing Regency Nissan, Inc. v. Taylor , 391 S.E.2d 467, 

470 (Ga. App. 1990)). 

        7	      The special verdict as answered by the jury read as follows: 

                1.	     Is it more likely true than not true that A&M Motors 

                        engaged in an unfair or deceptive act in its dealings 

                        with Robert Borgen? 

                Answer "yes" or "no."            Answer:     No 

                2.	     Is it more likely true than not true that A&M Motors 

                        misrepresented the model year of the Travelaire 280T 

                        motor home to plaintiff and that it was aware that the 

                        statement was false or misleading, or that a reasonably 


                                                  -9-	                                           6657

----------------------- Page 10-----------------------

                 After the jury verdict was read, Borgen asked the court to poll the jury but 

did   not object that the verdict was inconsistent.             The court discharged the jury   and 

instructed Borgen's attorney to prepare a judgment.               The court stated that because the 

jury had not found a UTPA violation, attorney's fees would be awarded under Alaska 

Civil Rule 82.     The court entered a final judgment in the case on October 11, 2010. 

                 On October 20, 2010, Borgen moved for a judgment that A&M Motors 

committed a UTPA violation and breached its contract with him, notwithstanding the 


                         careful dealership under similar circumstances would 

                         have     been     aware     the   statement     was     false   or 


                 Answer "yes" or "no."             Answer:      Yes 

                 . . . . 

                 2(a)	 Was A&M Motor's misrepresentation the legal cause 

                         of injury to Robert Borgen? 

                 Answer "yes" or "no."             Answer:      Yes 

                 3.	     Did   A&M   Motors   breach   its   contract   with   Robert 


                 Answer "yes" or "no."             Answer:     No        

                 . . . .

                 4.	     If your answers to Questions No. 1, 2, and 3 all were 

                         "no,"   the   jury   foreperson   should   sign   and   date   the 

                         Special   Verdict   Form   where   indicated.        No   further 

                         deliberations are necessary. 

                         If any of your answers to Question No. 1, 2, or 3 were 

                         "yes," what are the damages if any, suffered by the 

                         plaintiff as a result of A&M Motors, Inc.'s conduct? 

                 Total   $3,097.50 

                                                   -10-	                                             6657

----------------------- Page 11-----------------------

jury's verdict.   Alternatively, he asked for a new trial.  The day before, he had requested 

actual attorney's fees pursuant to the UTPA; his billing records showed that he incurred 

more than $100,000 in fees during the course of the case.          A&M Motors opposed the 

attorney's fees motion, arguing that the court should award fees under Civil Rule 82. 

               The court denied the motion for a new trial or judgment NOV.           The court 

held that because Borgen failed to object to the alleged inconsistency of the verdict 

before    the  jury  was  discharged,   he  was   barred  "from   arguing   that  any  proposed 

inconsistency entitle[d] [him] to a new trial as a matter of law." The court considered the 

potential inconsistency in the verdict when ruling on the motion for a judgment NOV. 

The     court  found    Borgen's    argument     about   the   inconsistency    of  the   verdict 

"unconvincing," noting that "[n]ot every misrepresentation is an unfair trade practice and 

the jury was specifically instructed that a good faith but mistaken belief cannot be the 

basis for a finding of an unfair or deceptive act or practice."  Viewing the evidence in the 

light most favorable to A&M Motors, the court decided that the jury could have found 

that the misrepresentation about the model year was based on a good-faith but mistaken 

belief; on the contract claim, the court concluded that the jury could have decided that 

the model year was not material to the contract, so Borgen received what he bargained 

for.  The court also denied the motion for a new trial.          Independently weighing the 

evidence, the court decided that the verdict of $3,097.50 was not against the weight of 

the evidence. 

               Borgen requested reconsideration of the court's order denying his motion 

for judgment NOV, taking   issue with the court's conclusion that in the context of a 

commercial transaction not every material misrepresentation is an unfair trade practice 

and     arguing   that   the  court's   conclusion     was   contrary    to  the   language    of 

AS 45.50.471(b)(12).      Borgen also claimed that the court was mistaken in relying on 

Kenai Chrysler Center, Inc. v. Denison as a basis for concluding that good faith would 

                                              -11-                                         6657

----------------------- Page 12-----------------------

be   a   defense   to   the   claim   under   review   since   the   issue   in  Kenai   Chrysler   was   not 

misrepresentation but whether or not a contract was valid.  The court denied the request 

for reconsideration. 

                The court awarded Rule 82 fees of $686.69 to Borgen.  The court decided 

that there was "no basis" for awarding enhanced fees and   that "[n]othing about the 

requested fees appear[ed] justified." 

                Borgen appeals.      In his brief on appeal he lists eight issues presented for 

review   and   presents   six   captioned   arguments.     Borgen's   argument   headings   are   as 


                I.      The Trial Court Erred In Failing to Give the Proposed 

                        Jury Instruction of Plaintiff. 

                II.     The Trial Court Erred In Granting a Directed Verdict 

                        for   Mike   Morelli   at   the   Close   of   Plaintiff   Borgen's 


                III.    The Trial Court Erred In Failing to Grant a Judgment 

                        NOV or New Trial. 

                IV.     The Trial Court Should Have Granted a New Trial. 

                V.      The Trial Court Abused Its Discretion Or Erred As A 

                        Matter    Of   Law    In  The   Grant   of   Attorney's    Fees 


                VI.     The Trial Court Erred as a Matter of Law in Holding 

                        the Inconsistent Verdict Could Not Be Raised Because 

                        It Had Been Waived. 

                                                 - 12-                                           6657

----------------------- Page 13-----------------------


        A.      The Unfair Trade Practices And Consumer Protection Act 


                Alaska's Unfair Trade Practices and Consumer Protection Act (UTPA)  is 

based on a model act of the same name developed by the Federal Trade Commission in 

collaboration with the Council of State Governments.9                All states have now adopted 

legislation   prohibiting   unfair   or   deceptive   acts   or   practices   in   trade   or   commerce.10 

Almost all the state acts generally declare to be unlawful "unfair or deceptive acts or 

practices" in the conduct of trade or commerce.11             This language duplicates the broad 

proscriptive language contained in section 5(a)(1) of the Federal Trade Commission 

Act.12   A   number of statutes go further and itemize specific practices that are per se 


        8       AS 45.50.471-.561. 

        9       William A. Lovett, State Deceptive Trade Practice Legislation, 46 TUL . L. 

REV . 724, 730 (1972).       The current version of the model act appears at 29 SUGGESTED 


        10      RESTATEMENT (THIRD) OF UNFAIR COMPETITION  1 statutory note (1995). 

        11      Id .   In   some   states   the  prohibition    extends   to  "false,  misleading,     or 

deceptive" acts.  Id. 

        12      15 U.S.C.  45(a)(1) (2006). 

        13      Marshall   A.   Leaffer   &   Michael   H.   Lipson,  Consumer   Actions   Against 

Unfair or Deceptive Acts or Practices: The Private Uses of Federal Trade Commission 

Jurisprudence , 48 GEO . WASH . L. REV . 521, 531 (1980) (footnote omitted): 

                        Presently,   the   largest   number   of   UDAP   [Unfair   or 

                Deceptive Acts or Practices] statutes contain language either 

                identical    to   section   5  -    including    unfair    methods     of 

                competition - or a proscription against "unfair or deceptive 


                                                  -13-                                            6657

----------------------- Page 14-----------------------

                 Alaska's      UTPA       takes   both    the   general     and    the   per   se  approach. 

Subsection .471(a) of the UTPA declares "unfair or deceptive acts or practices in the 

conduct of trade or commerce" to be unlawful.                  Subsection .471(b) contains a long list 

of subparagraphs describing types of conduct that are by definition unfair or deceptive 

acts   or   practices   and   are   thus   unlawful.   Borgen   based   his   claim   on   three   of   these 

subparagraphs:        (b)(6),    (11),   and   (12).14	   The    Act    provides     for  treble   damages15 


                 acts or practices" alone.   A substantial number of the statutes 

                 itemize certain deceptive practices that are per se  unlawful, 

                 with or without a "catch-all" phrase designed to reach any 


         14      The provisions of section .471 relevant to this claim are as follows: 

                          (a)     Unfair   methods   of   competition   and   unfair   or 

                 deceptive      acts   or   practices    in   the  conduct     of   trade   or 

                 commerce are declared to be unlawful. 

                          (b)     The terms "unfair methods of competition" and 

                 "unfair or deceptive acts or practices" include, but are not 

                 limited to, the following acts: 

                          . . . . 

                          (6)     representing       that   goods   or   services   are   of   a 

                 particular standard, quality, or grade, or that goods are of a 

                 particular style or model, if they are of another; 

                          . . . . 

                          (11)    engaging       in   any   other    conduct     creating     a 

                 likelihood of confusion or of misunderstanding and which 

                 misleads, deceives or damages a buyer   or   a competitor in 

                 connection       with    the  sale   or   advertisement      of   goods    or 


                          (12)	   using     or   employing      deception,     fraud,    false 


                                                     -14-	                                               6657

----------------------- Page 15-----------------------

and for an award of full reasonable attorney's fees to a prevailing plaintiff.16                 The Act 

also   states   that   when   interpreting   section   .471   "due   consideration   and   great   weight 

should be given" interpretations of section 5(a)(1) of the Federal Trade Commission 



                pretense,     false  promise,     misrepresentation,      or  knowingly 

                 concealing,   suppressing,   or   omitting   a   material   fact   with 

                 intent that others rely upon the concealment, suppression, or 

                 omission   in   connection   with   the   sale   or   advertisement   of 

                 goods or services whether or not a person has in fact been 

                misled, deceived or damaged . . . . 

        15      AS 45.50.531(a) provides: 

                         A person who suffers an ascertainable loss of money 

                 or   property   as   a   result   of   another   person's   act   or   practice 

                 declared unlawful by AS 45.50.471 may bring a civil action 

                to recover for each unlawful act or practice three times the 

                 actual damages or $500, whichever is greater. The court may 

                provide      other   relief  it  considers    necessary     and    proper. 

                Nothing in this subsection prevents a person who brings an 

                 action under this subsection from pursuing other remedies 

                 available under other law, including common law. 

        16      AS 45.50.537(a) provides: 

                         In   an   action   brought     by   a  private   person     under 

                AS   45.50.471   -   45.50.561,   a   prevailing   plaintiff   shall   be 

                 awarded costs as provided by court rule and full reasonable 

                 attorney fees at the prevailing reasonable rate. 

        17      AS 45.50.545. 

                                                   -15-                                              6657

----------------------- Page 16-----------------------

        B.      Judgment NOV 

                1.      Preliminary observations 

                We turn first to Borgen's argument that judgment NOV should have been 

granted in his favor on his UTPA claim.   This argument encompasses three of the issues 

that Borgen lists as presented for review: 

                Did   the   misrepresentation   of   the   date   of   the   motor   home 

                violate the consumer protection [act] as a matter of law? 

                Was the finding of the jury that the date of the motor home 

                was misrepresented binding on the court? 

                Did the court abuse its discretion in failing to grant judgment 

                NOV or a new trial where the jury had found the dealer had 

                committed a material misrepresentation as to the date of the 

                motor home? 

                We note at the outset of our discussion of this point that the terminology 

used by our Civil Rule 50 is not especially descriptive.   Motions for a "directed verdict" 

under Rule 50(a) and motions for "judgment notwithstanding the verdict" under 50(b) 

can be based on any ground that entitles the movant to judgment as a matter of law.  The 

Federal    Rules    of  Civil  Procedure,    in  recognition    of  the  problems     posed   by   this 

nomenclature, now call a Rule 50(a) motion a "motion for judgment as a matter of law"; 

a Rule 50(b) motion is simply a "renewed motion for judgment as a matter of law."18 

        18      Wright & Miller discuss the nomenclature change to Federal Rule 50 as 


                The    Advisory    Committee      Note   to  the  1991    amendment 

                explains    that   the  former    language    "is  misleading     as  a 

                description of the relationship between judge and jury.           It is 

                also   freighted    with  anachronisms.      .  .  ." Although      the 

                amendment was not intended to alter the substantive content 

                of the standard, the new language seems consistent with a 


                                                 -16-                                           6657

----------------------- Page 17-----------------------

Understanding this point is important in this case, because Borgen's claim here is, among 

other things, that he is entitled to judgment as a matter of law because of findings made 

in the special verdict, rather than notwithstanding them.               We have previously affirmed 

the grant of judgment notwithstanding the verdict based on findings in a special verdict 

that were dispositive for the movant.19 

                 Motions for judgment notwithstanding the verdict present questions of law 

that are reviewed on appeal de novo rather than deferentially.20               Where such a motion is 

evidence based, a trial court can only grant the motion where the evidence is such that, 


                 mood of curbing inhibitions against granting the motion.  The 

                 Note assures that "action taken under the rule . . . is not an 

                 intrusion   on   any   responsibility   for   factual   determinations 

                 conferred   on   the   jury   by   the   Seventh   Amendment   or   any 

                 other provision of federal law," and stresses that the revision 

                 "aims     to   facilitate   the    exercise    by    the   court    of   its 

                 responsibility   to   assure   the   fidelity   of   its   judgment   to   the 

                 controlling law . . . ." 


 2521, at 223-24 (3d ed. 2008) (footnotes omitted). 

        19       L.D.G., Inc. v. Brown , 211 P.3d 1110, 1118-21 (Alaska 2009).  See also 

Gilbert v. City of Salinas, No. H022128, 2002 WL 118609 at *6 (Cal. App. 2002): 

                         By     rejecting    plaintiff's    claims    against    the   four 

                 individual defendants, the jury removed any foundation for 

                 a   verdict   against   the   City.   Therefore,   the   verdict   cannot 

                 stand,    and    the   trial   court   properly     entered     judgment 

                 notwithstanding that verdict. 

        20       Cameron v. Chang-Craft, 251 P.3d 1008, 1016-18 (Alaska 2011). 

                                                    -17-                                              6657

----------------------- Page 18-----------------------

when viewed   in the light most favorable to the nonmoving party, reasonable people 

could not differ in their judgment; an appellate court must use the same test.21 

                 This case involves the use and interpretation of a special verdict.               Special 

verdicts are provided for by Alaska Civil Rule 49(b).22                   The rule contemplates   that 

written questions that lend themselves to brief answers may be submitted to the jury and 

the jury's answers are findings "upon each issue of fact" submitted.  It is the duty of the 

court   to   apply   the   law   applicable   to   the   facts   so   found. "Under   the   special   verdict 

        21       Id. ; Lynden, Inc. v. Walker , 30 P.3d 609, 612 (Alaska 2001); Mullen v. 

Christiansen, 642 P.2d 1345, 1348 (Alaska 1982). 

        22       Civil Rule 49(b) provides: 

                         Special   Verdicts.      The   court   may   require   a   jury   to 

                 return only a special verdict in the form of a special written 

                 finding upon each issue of fact.         In that event the court may 

                 submit to the jury written questions susceptible of categorical 

                 or   other   brief   answer   or   may   submit   written   forms   of   the 

                 several special findings which might properly be made under 

                 the pleadings and evidence; or it may use such other method 

                 of submitting the issues and requiring the written findings 

                 thereon as it deems most appropriate.   The court shall give to 

                 the   jury   such   explanation   and   instruction   concerning        the 

                 matter thus submitted as may be necessary to enable the jury 

                 to make its findings upon each issue.   If in so doing the court 

                 omits   any   issue   of   fact   raised   by   the   pleadings   or   by   the 

                 evidence, each party waives the right to a trial by jury of the 

                 issue   so   omitted    unless   before    the  jury  retires   the  party 

                 demands its submission to the jury.           As to an issue omitted 

                 without such demand the court may make a finding; or, if it 

                 fails to do so, it shall be deemed to have made a finding in 

                 accord with the judgment on the special verdict. 

                                                    -18-                                              6657

----------------------- Page 19-----------------------

procedure, the jury makes findings of fact and the court applies the law."23                   In cases 

where the jury's answers to the questions in a special verdict are potentially inconsistent, 

the trial judge should harmonize the answers if such is reasonably possible. 

                        To   give effect to the jury trial right in civil cases, a 

                court     must     determine,     by    examining      the    pleadings, 

                instructions,   arguments,   and   evidence,   whether   there   is   a 

                logical view of the case that harmonizes what seems at first 

                to be an inconsistent verdict.[24] 

"The touchstone in reconciling apparent conflict is whether 'the answers may fairly be 

said to represent a logical and probable decision on the relevant issues as submitted.' "25 

                If the special verdict answers are not fairly capable of being reconciled, a 

new trial is ordinarily required: 

                If the jury's answers are inconsistent with each other even 

                when the presiding judge views them in the most generous 

                way to avoid such a conclusion, a new trial under Rule 59(a) 


PROCEDURE  2503, at 94 (3d ed. 2008). 

        24      Schmit v. Stewart, 601 P.2d 256, 256 (Alaska 1979). See Yang v. Yoo, 812 

P.2d   210,   215   (Alaska   1991);  see   also  9B   CHARLES      ALAN    WRIGHT     &  ARTHUR      R. 

MILLER ,  FEDERAL PRACTICE  & PROCEDURE  2510, at 159-63 (3d ed. 2008) (quoting 

Atl. & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd. , 369 U.S. 355, 364 (1962)): 

                The case law establishes that it is the duty of the district judge 

                to   attempt   to   harmonize   the   jury's   answers,   if   it   is   at   all 

                possible     under   a  fair  reading    of  the  responses.    As    the 

                Supreme   Court   stated   almost   a   half-century   ago:   "Where 

                there is a view of the case that makes the jury's answers to 

                special interrogatories consistent, they must be resolved that 


        25       White v. Grinfas, 809 F.2d 1157, 1161 (5th Cir. 1987) (quoting Griffin v. 

Matherne , 471 F.2d 911, 915 (5th Cir. 1973)). 

                                                  -19-                                             6657

----------------------- Page 20-----------------------

                ordinarily is the proper pathway for the trial judge to follow 

                and may be the required course . . . .[26] 

The    ultimate    reason    why   a  new    trial  may   be   necessary    in  case   of  a  material, 

irreconcilable conflict in special verdict answers is to give effect to the constitutional 

right to a jury trial.27 

                2.      Arguments of the parties 

                Borgen argues that he should have been granted judgment NOV because 

all of the elements that were necessary to establish an actionable misrepresentation under 

the UTPA were proven.           He bases this argument on the special verdict answers that 

found that A&M Motors either knowingly or negligently misrepresented the model year 

of the motor home and that the misrepresentation caused damage to him.  He also argues 

that   the   facts   as   to   the   misrepresentation   were   undisputed   and   thus,   by   implication, 

regardless of the special verdict, he was entitled to judgment NOV.               As to the required 

elements, he argues that to prove a violation of AS 45.50.471(b)(12) he needed to show 

simply a material misrepresentation and resulting damage.                 Since the special verdict 

established these elements, he contends that the court should have entered judgment 


PROCEDURE  2510, at 166-70 (3d ed. 2008); see State v. Lewis, 785 P.2d 24, 27 (Alaska 

1990) (internal inconsistencies in special verdict required new trial). 

        27      See Yang, 812 P.2d at 215 (failure to reconcile "results in a collision with 

the Seventh Amendment" (quoting Atl. & Gulf Stevedores , 369 U.S. at 364)); Schmit, 

601 P.2d at 256 (reconciliation necessary "[t]o give effect to the jury trial right in civil 

cases").   See also Ratigan v. N.Y. Cent. R.R. Co. , 291 F.2d 548, 557-58 (2d Cir. 1961) 

(Friendly, J., concurring and dissenting) ("[T]he only proper course, once the jury was 

discharged, was to order a new trial; neither the district court nor we are permitted to 

guess which of the two answers the jury would have altered if the alleged inconsistency 

had been promptly explained.            The ruling of the district judge, now affirmed by my 

brothers, seems to me to deprive the Central of its right to a jury trial."). 

                                                  -20-                                            6657

----------------------- Page 21-----------------------

under the UTPA in his favor.  He asks this court to either correct this error or order a new 


                         There is likewise no dispute as to the law to be applied. 

                 AS 45.50.471 sets forth the list of unlawful acts and practices 

                 under the Unfair Trade Practices Act. Section (b) specifically 

                 notes that misrepresentation of a material fact is a violation: 

                         (12)     using     or  employing      deception,     fraud,   false 

                         pretense,       false    promise,      misrepresentation,         or 

                         knowingly        concealing,     suppressing,     or   omitting    a 

                         material   fact   with    intent   that   others  rely   upon   the 

                         concealment, suppression, or omission in connection 

                         with   the   sale   or   advertisement   of   goods   or   services 

                         whether      or  not   a  person    has  in  fact   been   misled, 

                         deceived or damaged; 

                         . . . . 

                         The jury found material misrepresentation and damage 

                 therefrom,      but  no   violation    of  the  Act.    This    is  clearly 

                 erroneous and the court must either correct the error or order 

                 a new trial. 

                 In response to Borgen's argument, A&M Motors makes two contentions. 

It suggests first that Borgen is precluded from contending that the jury's finding of 

misrepresentation requires a finding of a UTPA violation: 

                         At no time during the life of this case, nor during the 

                 jury instructions, did Borgen ever discuss that a finding of 

                 liability   on   the  misrepresentation       claim    would     require   a 

                 finding of liability on the UTPA claim.  It was not until after 

                 the   jury's   decision   that   Borgen   suddenly   decided   that   the 

                 elements were essentially bound together.              Borgen brought 

                 both claims before the jury.          He gave the choice of which 

                 claim to apply to the jury.   The jury chose misrepresentation 

                 rather than UTPA. 

                 Second, A&M Motors argues that the affirmative defense as to a "good 

faith, but mistaken belief" applied to the UTPA claim but not the misrepresentation 

                                                    -21-                                               6657

----------------------- Page 22-----------------------

claim.  A&M Motors contends that when viewing the evidence in a light favorable to it 

there was ample proof that any mistake it made was in good faith. 

                In reply, Borgen reiterates that the jury finding   that   A&M   Motors had 

misrepresented the model year of the motor home was a misrepresentation within the 

meaning      of  subsection    .471(b)(12)    of  the  UTPA.      He    contends    that  this  finding 

established the law of the case and raised the legal issue as to whether the finding also 

required the court to find a violation of the UTPA.   Borgen then cites the case on which 

he previously relied in moving for summary judgment, setting out a block quote that 

states   that   under  a  similar   North   Carolina    statute  "a  purchaser    of  misrepresented 

merchandise does not have to prove . . . bad faith . . . ; it is enough that the goods bought 

were misrepresented."28 

                3.      Borgen is entitled to judgment under the UTPA. 

                A&M Motors's argument that Borgen should be precluded from arguing 

that the jury's special verdict as to misrepresentation does not entitle him to judgment as 

a matter of law under the UTPA has no merit. Borgen has consistently presented a claim 

for misrepresentation under the Act.   He based his motion for summary judgment on the 

misrepresentation subparagraphs of subsection .471(b) and contended that what he had 

to prove in order to be entitled to partial summary judgment under the Act was simply 

that a material misrepresentation was made.             Further, he requested an instruction that 

closely   followed   the   language   of   subsection   .471(b)(6)   of   the   Act. The   instruction 

would, if given, have required the jury to find a violation of the UTPA if the jury found 

        28      Myers v. Liberty Lincoln-Mercury, Inc. , 365 S.E.2d. 663, 664 (N.C. App. 


                                                 -22-                                              6657 

----------------------- Page 23-----------------------

that the model year of the motor home was misrepresented.29             Moreover, the jury was not 

asked to choose between liability under the UTPA and liability under a common law 

theory     of  misrepresentation.30      The    jury   was    not   instructed    that   a  finding    of 

misrepresentation would not lead to liability under the UTPA, nor was it instructed that 

only if it found that A&M Motors had engaged in an unfair or deceptive act would it be 

liable under the UTPA.         In fact, the instructions given by the court did not at any point 

mention the UTPA. 

                A&M Motors is correct in observing that the court instructed the jury that 

"[a] good faith, but mistaken belief cannot be the basis for a finding of an unfair or 

deceptive act or practice"31 and that the court did not similarly permit good faith to serve 

as a defense to misrepresentation.         A&M Motors is also right in its argument that there 

was sufficient evidence to support a jury conclusion that it had acted with a good-faith 

but mistaken belief as to the model year of the motor home.              But these points highlight 

rather than resolve the legal question as to whether a claim of misrepresentation brought 

        29      Borgen's proposed jury instruction number 3 provided: 

                        Mr. Borgen claims that the Defendants misrepresented 

                the model year of the motor home as a 2003 when it was not 

                and    thus   violated   the  Alaska    Unfair   Trade    Practice   and 

                Consumer Protection Act.          If you find that the Defendants 

                made the statement that the motor home was a 2003, and if 

                you   determine that this statement was a misrepresentation 

                then   you   must   find   that   the   Defendants   violated   .   .   .   the 

                Alaska Unfair Trade Practice and Consumer Protection Act. 

        30      AS   45.50.531(a)   provides   that   a   UTPA   claim   does   not   preclude   other 

remedies, including common law remedies. 

        31      Instruction No. 35. 

                                                  -23-                                            6657

----------------------- Page 24-----------------------

under one of the subparagraphs of subsection .471(b) of the Act is subject to a good-faith 


                We now turn to this question.           Under subsection .471(b)(12), "using . . . 

misrepresentation, or knowingly concealing, suppressing, or omitting a material fact with 

intent that others rely upon the concealment, suppression, or omission in connection with 

the sale . . . of goods . . . whether or not a person has in fact been misled, deceived or 

damaged" is unlawful under the UTPA.33 

                This subparagraph implies that affirmative acts of misrepresentation need 

not   be   knowing;   "knowingly"   only   applies   to   acts   of   concealment,   suppression,   or 

omission.      Permitting   a   defense   of   good   faith   would   generally   excuse   unknowing 

affirmative misrepresentations, and thus would conflict with the evident legislative intent 

to impose liability for them. 

                Other courts construing similar statutes have held that a seller's good or bad 

faith   is   unimportant   when   there   is   an   affirmative   misrepresentation   and   buyers   can 

recover for unknowing misrepresentations without having to prove bad faith or disprove 

a seller's assertion of good faith.      Examples of such authorities include: 

        32      We note that Borgen objected to the good-faith instruction when it was 

proposed by A&M Motors on the grounds that good faith does not excuse a seller from 

its duty to investigate potential problems.          Violation of a duty to investigate was the 

foundation for his theory of fault-based liability under the UTPA.                 He did not recede 

from   this   position   when   the   court   decided   to   give   the   instruction.  Further,   more 

generally,   he   based   his   motion   for   summary   judgment   and   his   proposed   instruction 

number      3   on   a  theory    predicating    liability  under    the   UTPA      on   any   material 

misrepresentation, even an innocent one. Thus Borgen did not waive his right to contend 

that   good   faith   is   not   a   defense   to   his   claim. See  ASRC   Energy   Servs.   Power   & 

Commc'ns, LLC         v. Golden Valley Elec. Ass'n, Inc., 267 P.3d 1151, 1160-61 (Alaska 

2011) (no waiver regarding jury instruction where mid-trial objections were presented). 

        33      See supra , note 14. 

                                                  -24-                                             6657

----------------------- Page 25-----------------------

*	      Duhl v. Nash Realty Inc. ,34 construing a section of the Illinois Consumer Fraud 

        and Deceptive Business Practices Act having a similar structure to subparagraph 

        (b)(12) of section .471 of the Alaska Act: 

                 [I]t is well established that under the Act the intention of the 

                 seller (his good or bad faith) is not important and a plaintiff 

                 can recover under the Act for innocent misrepresentations.[35] 

*	      Gupta v. Asha Enterprises, LLC,36 construing a provision of New Jersey law with 

        a similar structure to subsection .471(b)(12) of the Alaska Act (i.e., prohibiting 

        misrepresentation, or knowingly concealing): 

                 We have held that unlawful conduct can consist of . . . "an 

                 affirmative      misrepresentation,       even    if  not   made     with 

                knowledge of its falsity or with an intent to deceive". . . . 

                         In contrast to a claim of actionable omission, which 

                requires a finding that the defendant acted knowingly, one 

                who makes an affirmative misrepresentation is liable under 

                the [Consumer Fraud Act] even in the absence of knowledge 

                 of   the   falsity   of   the   misrepresentation,   negligence,   or   the 

                 intent to deceive.[37] 

*	      State   ex   rel   Miller   v.   Pace,38  construing   a   section   of   Iowa's   consumer   fraud 

        statute similar to subsection .471(b)(12):           "[T]here is no requirement under the 

        statute     that   a   violator    have    knowledge       of   the   falsity   of   his   or   her 

        34       429 N.E.2d 1267 (Ill. App. 1981).

        35      Id . at 1277.

      27 A.3d 953 (N.J. Super. App. Div. 2011). 

        37      Id . at 959 (quoting Stoecker v. Echevarria, 975 A.2d 975, 990 (N.J. Super. 

App. Div. 2009)). 

        38       677 N.W.2d 761 (Iowa 2004). 

                                                   -25-	                                             6657

----------------------- Page 26-----------------------

        representations."39      The     defendant's   claim   that   he   was   misled   "just   like   his 

        clients" was "immaterial."40 

                Both Ohio and Texas hold that intent or knowledge is not an element of a 

"laundry list" claim under their consumer protection statutes unless the statute itself so 

provides.41   Thus, in Smith v. Herco, Inc., the Texas Court of Appeals held that a seller's 

representation to a buyer that "he would own all of the interior" of his townhouse was 

actionable under the Texas Deceptive Trade Practices Act (DTPA) even though the seller 

relied on an incorrect survey in making the representation.42 

                Even where the applicable statute merely prohibits unfair or deceptive acts 

or practices without also making specific acts per se unlawful, courts have held that 

innocent material misrepresentations are deceptive acts which give rise to liability.  For 

example in Myers v. Liberty Lincoln-Mercury, Inc. ,43 the court held that misrepresenting 

the model year of a vehicle was a violation of the deceptive act provisions of the North 

Carolina   statute   even   if   the   misrepresentation   was   not   intentional   or   fraudulent,   but 

merely a mistake: "This contention has no legal basis, since to prevail in a Chapter 75 

case, a purchaser of misrepresented merchandise does not have to prove fraud, bad faith 

        39      Id. at 771. 

        40      Id. 

        41      Fletcher v. Don Foss of Cleveland, Inc. , 628 N.E.2d 60, 62 (Ohio App. 

1993); Pennington v. Singleton , 606 S.W.2d 682, 689-90 (Tex. 1980). 

        42      900 S.W.2d 852, 858-60 (Tex. App. 1995).   The buyer's claim was based 

in part on  17.46(b)(7) of the Texas DTPA, which is identical to AS 45.50.471(b)(6). 

Id. at 858 & n.4; AS 45.50.471(b)(6).             AS 45.50.471(b)(6) was one of the bases of 

Borgen's UTPA claim. 

        43      365 S.E.2d 663 (N.C. App. 1988). 

                                                  -26-                                             6657

----------------------- Page 27-----------------------

or intentional deception as at common law; it is enough that the goods bought were 

misrepresented . . . ."44 

                 Myers relied on a decision of the North Carolina Supreme Court, Marshall 

v. Miller .45  In Marshall the question presented was whether bad faith was an essential 

element   in   a   private   action   for   misrepresentation   under   the   North   Carolina   statute 

prohibiting deceptive trade practices.   An intermediate appellate court had so held.  The 

intermediate appellate   court and   the   North   Carolina   Supreme   Court recognized   that 

federal decisions construing the F.T.C. Act "have uniformly held that the FTC may issue 

a cease and desist order to enforce Section 5 where an act or practice has a capacity to 

deceive, regardless of the presence or absence of good faith on the part of the offending 

party."46    But, since the F.T.C. Act confers no private right of action, the question in 

Marshall was whether the private right of action afforded   under the North Carolina 

statute should include an additional element of bad faith.  The North Carolina Supreme 

Court answered this question in the negative, noting that nothing in North Carolina's 

prior    jurisprudence      concerning      the  statute   "limits   the   precedential     value   of  FTC 

jurisprudence to cases or actions brought by the Attorney General" and "unlike statutes 

enacted   by   some   of   our   sister   states,   there   is   no   explicit   statutory   requirement   of   a 

showing of bad faith."47 

         44      Id . at 664. 

         45      276 S.E.2d 397 (N.C. 1981). 

         46      Id . at 399. 

         47      Id. at 403. 

                                                    -27-                                               6657

----------------------- Page 28-----------------------

                 Another case that holds that "deceptive acts" under a consumer protection 

statute include innocent misrepresentations is Bartner v. Carter .48                In Bartner the court 


                 [T]he federal decisions are clear that a . . . practice or act may 

                 be   "deceptive"   even   though   defendant   had   no   purpose   to 

                 deceive, . . . and acted in good faith. . . .         In view of those 

                 decisions,   appellees   cannot   avoid   liability   merely   because 

                 they made the misrepresentation in good faith and without 

                 purpose to deceive.[49] 

                 The Connecticut Supreme Court interpreted its Unfair Trade Practices Act 

as not requiring proof that the defendant was aware that his misrepresentation was false: 

                 In keeping with the remedial purpose of the federal Unfair 

                 Trade   Practices   Act,   other   courts   and   commentators   have 

                 interpreted   the   act   not   to   require  proof   that   the   actor   or 

                 declarant knew of the falsity of his statement or act. . . .  On 

                 the basis of these prior holdings, we conclude that knowledge 

                 of falsity, either constructive or actual, need not be proven to 

                 establish     a  violation    of   [the   Connecticut      Unfair    Trade 

                 Practices Act].[50] 

Good   faith   or   lack   of   intent   to   deceive   are   likewise   not   defenses   under   Vermont's 

Consumer Fraud Act.51 

                 Because   the   standard   for   a   deceptive   act   or   practice   is   the   capacity   or 

tendency to deceive, several state and federal courts have determined that even truthful 

statements can be actionable under some circumstances because of the manner in which 

        48       405 A.2d 194 (Me. 1979). 

        49       Id . at 200. 

        50       Web Press Servs. Corp. v. New London Motors, Inc., 525 A.2d 57, 68 

(Conn. 1987). 

        51       Carter v. Gugliuzzi, 716 A.2d 17, 24-25 (Vt. 1998). 

                                                    -28-                                               6657

----------------------- Page 29-----------------------

the   facts   are   presented.52   For   example,   the    Washington   Supreme   Court   held   that 

collection notices for a subrogation claim were actionable under Washington's Consumer 

Protection Act because consumers could be misled into believing that the notices were 

related to "a liquidated debt that the recipient [was] bound to pay rather than a potential 

tort claim that [was] subject to dispute" even though the information in the notices was 


                 Section     .545    of   Alaska's     UTPA      mandates      that   "[i]n   interpreting 

AS 45.50.471 due consideration and great weight should be given the interpretations of 

15   U.S.C.      45(a)(1)   (   5(a)(1)   of   the   Federal   Trade   Commission   Act)."    We   have 

followed this section and have applied F.T.C. precedent to private claims brought under 

the UTPA.54      As in other jurisdictions, bad faith is not an explicit element of a private 

action, nor is good faith an explicit defense. 

                 Our   case   law   has   adopted   the   F.T.C. definition   as   to   whether   an   act   is 

deceptive.      "Regarding      the  standard     for  deceptive     practices,   we    held   in O'Neill 

Investigations that '[a]n act or practice is deceptive or unfair if it has the capacity or 

tendency to deceive' where neither actual injury as a result of the deception nor intent 

        52      Kraft, Inc. v. F.T.C. , 970 F.2d   311, 322 (7th Cir. 1992); Pearce v. Am. 

Defender Life Ins. Co. , 343 S.E.2d 174, 180 (N.C. 1986); deBondt v. Carlton Motorcars, 

Inc. , 536 S.E.2d 399, 407 (S.C. App. 2000);  State v. Kaiser, 254 P.3d 850, 858 (Wash. 

App. 2011). 

        53      Panag v. Farmers Ins. Co. of Wash. , 204 P.3d 885, 896, 903 (Wash. 2009). 

        54       See Kenai Chrysler Ctr., Inc. v. Denison , 167 P.3d 1240 (Alaska 2007); 

Odom   v.   Fairbanks   Mem'l   Hosp.,   999   P.2d   123   (Alaska   2000).          In ASRC   Energy 

Services Power & Communications, LLC v. Golden Valley Electric Ass'n, Inc., 267 P.3d 

1151, 1158-63 (Alaska 2011), we held that section .545 of the UTPA would continue to 

be applied to the definition of "unfair . . . acts or practices" formulated in F.T.C. v. 

Sperry & Hutchinson Co., 405 U.S. 233, 244 n.5 (1972) rather than to a modified, less 

consumer friendly definition of unfairness that was codified by Congress in 1994. 

                                                   -29-                                              6657

----------------------- Page 30-----------------------

to   deceive   were   required."55   As   we   noted   in ASRC     Energy   Services   Power    & 

Communications,        LLC   v.  Golden    Valley  Electric   Ass'n,  Inc.,  the  Federal   Trade 

Commission announced a modified standard for a deceptive act or practice subsequent 

to our decision in O'Neill Investigations:   "[F]irst, there is a representation, omission, or 

practice   that,   second,   is  likely  to  mislead  consumers  acting  reasonably    under   the 

circumstances, and third, the representation, omission, or practice is material."56          We 

concluded in ASRC Energy that this was not an appreciable change from the standard 

that we adopted in O'Neill: 

               To show deception under the FTC Act, intent, scienter, actual 

               reliance    or   damages,    and   even    actual   deception    are 

               unnecessary. All that it is required is proof that a practice has 

               a    tendency    or  capacity    (or,  under    the  FTC's    latest 

               formulation, is likely) to deceive even a significant minority 

               of consumers.[57] 

               As noted by the North Carolina Supreme Court in Marshall and the Maine 

Supreme Court in Bartner , and as is suggested by our discussion of the definition of 

deceptive practices in O'Neill and ASRC Energy , F.T.C. precedent concerning whether 

an act or practice is deceptive does not permit a good-faith defense.58 

        55     ASRC     Energy    Servs. ,  267   P.3d  at  1160    (quoting  State   v.  O'Neill 

Investigations, Inc. , 609 P.2d 520, 534-35 (Alaska 1980)). 

        56     267 P.3d at 1160 (quoting In re Cliffdale Assocs., Inc. , 103 F.T.C. 110 


        57     Id.  at   1163  (quoting  NATIONAL     CONSUMER      LAW   CENTER ,  UNFAIR     & 

DECEPTIVE ACTS & PRACTICES ,, at 190 (7th ed. 2008)). 

        58     See Chrysler Corp. v. F.T.C., 561 F.2d 357, 363 n.5 (D.C. Cir. 1977) ("An 

advertiser's     good    faith   does   not   immunize      it  from    responsibility    for   its 

misrepresentations . . . ."); Regina Corp. v. F.T.C. , 322 F.2d 765, 768 (3d Cir. 1963); 


                                              -30-                                          6657

----------------------- Page 31-----------------------

                The trial court believed that a good-faith defense was required based on 

Kenai Chrysler Center, Inc. v. Denison .59         In Kenai Chrysler a developmentally disabled 

young   man   bought   a   car   from   a   dealership.      His   parents,   who   also   served   as   his 

guardians, contacted the dealership and sought to return the car and rescind the contract 

on the grounds that the contract was void.  The dealership refused and took a series of 

steps that were designed to make recision more difficult. The parents brought suit under 

the UTPA and prevailed before a jury.  On appeal we observed that in State v. O'Neill 

Investigations,      Inc. ,60  we  had   adopted     a  multi-factored     approach     that  should    be 

considered in determining whether an "unfair" practice existed.61 

                The factors are: 

                 (1)   whether   the   practice,   without   necessarily   having   been 

                previously considered unlawful, offends public policy as it 

                has    been    established     by  statutes,   the   common      law,   or 

                 otherwise - whether, in other words, it is within at least the 

                penumbra        of   some     common-law,         statutory,   or   other 

                 established concept of unfairness; (2) whether it is immoral, 

                unethical, oppressive, or unscrupulous; (3) whether it causes 

                 substantial injury to consumers . . . .[62] 


Feil v. F.T.C. , 285 F.2d 879, 896 (9th Cir. 1960) ("Whether good or bad faith exists is 

not material, if the Commission finds that there is likelihood to deceive.").                   See also 

Bankers Sec. Corp. v. F.T.C. , 297 F.2d 403, 405 (3d Cir. 1961) (noting that ruling that 

advertising   was   deceptive   did   "not   depend   upon   or   even   imply   a   finding   that   [the 

business] intended to deceive"). 

        59       167 P.3d 1240 (Alaska 2007). 

        60       609 P.2d 520 (Alaska 1980). 

        61      Kenai Chrysler Ctr. , 167 P.3d at 1255. 

        62      Id . (quoting O'Neill Investigations, 609 P.2d at 535).              These are the so- 


                                                   -31-                                             6657

----------------------- Page 32-----------------------

We noted that the trial court had instructed the jury on these standards and observed that 

"Kenai Chrysler correctly asserts that these provisions require proof of something more 

than the mere assertion of a good faith but mistaken belief that a contract was valid."63 

We   then   observed   that   other   jurisdictions   "focus   on   the   unfairness   of   the   disputed 

practice   under   the   specific   circumstances   presented,"   noting   that   the   Fourth   Circuit 


                 an unfair trade practice as an "inequitable assertion of power 

                 or position," ruling that "[a]lthough it may be rare that the 

                 exercise     of   a  contractual     right  will   meet    this  stringent 

                 standard, it is possible for such an exercise, when it involves 

                 egregious and aggravating conduct, to constitute an unfair . . . 

                 trade practice . . . ."[64] 

Applying a "flexible, case specific approach" employed in the case law under discussion, 

the Kenai Chrysler court concluded that "reasonable jurors could fairly find that Kenai 

Chrysler's conduct went far beyond a simple assertion of the company's good faith belief 

that the sale contract was valid."65 

                 The discussion in Kenai Chrysler concerned the definition of an "unfair" 

act or practice under subsection .471(a). More specifically, that case discussed standards 

for determining when the insistence upon contract rights could be considered an unfair 

act.   The discussion in Kenai Chrysler  does not apply to specific conduct prohibited 

under the subparagraphs of subsection .471(b) and is distinguishable on this basis.  The 


called Sperry & Hutchison standards referred to supra note 54. 

        63       Id. at 1256. 

        64       Id . (quoting S. Atl. Ltd. P'ship of Tenn., L.P. v. Riese, 284 F.3d 518, 539-40 

(4th Cir. 2002)). 

        65       Id . 

                                                    -32-                                               6657

----------------------- Page 33-----------------------

discussion also does not apply to acts or practices that are "deceptive" as distinct from 

"unfair."  The two terms are used in the disjunctive in section .471(a), and either will 

suffice to give rise to liability.  Whether an act is "unfair" is determined by using the 

flexible and somewhat vague Sperry & Hutchison standards, whereas whether an act is 

"deceptive" is determined simply by asking whether it "has the capacity or tendency to 


               Material misrepresentations as prohibited under AS 45.50.471(b)(6) and 

(12) are by definition "unfair or deceptive acts or practices," and there is no need to 

independently define unfairness, or deception, when a violation of these subparagraphs 

is claimed. 

               A per se or automatic UDAP [Unfair or Deceptive Acts or 

               Practices] violation occurs when a practice violates a specific 

               UDAP        guideline,    and    violation   of   that    guideline 

               automatically is a UDAP violation. 

                       . . . All the court will have to do is determine if the 

               practice occurred is that described in the specific guideline.[67] 

This point is also made in the Alaska   Pattern Jury Instruction that concerns violation of 

specific provisions of AS 45.50.471(b).         The use note states: "The acts specified in 

AS 45.50.471(b) are unfair or deceptive by definition.         Therefore, if this instruction is 

used, instructions 10.03A [defining deceptive practices]          and 10.03B [essentially the 

Sperry factors defining unfair practices] are not required."68 

        66     ASRC   Energy   Servs.   Power   &  Commc'ns,   LLC   v.   Golden   Valley   Elec. 

Ass'n, Inc. , 267 P.3d 1151, 1159-60 (Alaska 2011). 

        67     NATIONAL     CONSUMER      LAW    CENTER ,  UNFAIR     &  DECEPTIVE      ACTS   & 

PRACTICES  3.2.1 (7th ed. 2008). 

        68     Alaska Civil Pattern Jury Instruction 10.01B (2005). 

                                              -33-                                          6657

----------------------- Page 34-----------------------

                 Moreover,      even    if  the  per  se  approach      as  to  listed  violations    under 

subsection .471(b) were not employed, the prohibition on deceptive acts or practices in 

subsection      .471(a)   also   encompasses       innocent   material   misrepresentations         without 

requiring   proof   of   bad   faith   or   permitting   a   defense   of   good   faith. We   reach   this 

conclusion based on F.T.C. precedent to which we give great weight, as well as case law 

from other jurisdictions reaching the same conclusion.69 

                 Borgen      is   therefore     correct    that   the    elements     of   his    case    for 

misrepresentation under section .471 were that (1) A&M Motors misrepresented the 

model year of the motor home by representing that it was a 2003 model when in fact it 

was a 2002 model; (2) that this misrepresentation was material; and (3) that it caused him 

damage.      He is also correct that these elements were established by the jury in answers 

to questions 2, 2a, and 4 of the special verdict. 

                 Based on these findings, judgment should be entered in favor of Borgen 

unless they conflict with other findings in the special verdict.   We find no conflict, based 

largely on the reconciliation offered by the trial court. 

                 With respect to the special verdict finding that A&M Motors did not engage 

in an unfair or deceptive act,  the jury could have found that A&M Motors was negligent 

in representing that the motor home was a 2003 model - because it was on notice of the 

potential problem and failed to investigate - but that it nonetheless acted in good faith 

because it had an honest belief based on the state title.70           Reconciling the special verdict 

answers   concerning   misrepresentation   with   the   answer   that   there   was   no   breach   of 

        69       See supra text accompanying notes 43-58. 

        70       Hence the incorrect good-faith-defense instruction serves as the basis for 

harmonizing the special verdict.  The fact that the instruction was incorrect is irrelevant 

for   purposes   of   harmonization,   for   the   fact   of   the   instruction   shows   that   the   jury's 

reasoning was not illogical. 

                                                    -34-                                              6657

----------------------- Page 35-----------------------

contract presents a closer question.        Counsel for A&M Motors argued to the jury that 

there was no breach of contract because Borgen received the particular motor home that 

he contracted to buy and therefore the contract between Borgen and A&M Motors was 

not breached.71     The superior court agreed that the jury could have so found.              We also 

agree that in light of this argument the apparent conflict between the special verdicts on 

misrepresentation and breach of contract can reasonably be reconciled using the "logical 

and probable" standard.72 

        C.      Remaining Issues 

                In view of our decision that Borgen should have been granted judgment 

NOV on his UTPA claim most of the other points on appeal are moot.  The two that are 

not moot are (1) whether he was entitled to judgment NOV or a new trial as to damages 

        71      Counsel argued: 

                Plaintiff claims that A&M breached its contract.           What was 

                the   contract   for?  The   contract   was   for   a   used   RV. Mr. 

                Borgen did not go to A&M looking for a 2003 TravelAire. 

                He told you that.   He said he walked on the lot and he wanted 

                a good, used RV. . . .      [T]hat's what he was sold.        He was 

                sold a used RV, [it] had a certain amount of mileage on it, it 

                had certain options in it . . . . 

                        . . . So, what does material mean?        Material.    Did the 

                fact that this was an '02 rather than an '03, would that have 

                caused Mr. Borgen not to purchase this vehicle.   No. . . .  He 

                went to the lot, he walked around, he saw one that he liked, 

                he negotiated the deal, he traded in his own used RV and he 

                was happy with the RV.  He's driven it around. He still owns 

                it. He hasn't tried to sell it. . . .  He bought the RV because 

                it was a nice, used RV. 

        72      See supra note 25. 

                                                 -35-                                            6657

----------------------- Page 36-----------------------

and (2) whether the court erred in granting a directed verdict for Mike Morelli.                 These 

require only brief discussion. 

                1.      Damages 

                As to damages, Borgen contends that the only evidence of damages was 

that presented by his witness, Oyster, who stated that the difference in value between a 

2002 and 2003 Travelaire motor home was in the range of $5,000 to $10,000.  He argues 

therefore that there was no justification for the jury's award of slightly more than $3,000. 

A&M Motors responds that Oyster's opinion of the difference in value related to the 

difference in value between a 2002 and 2003 Travelaire as of 2009, whereas the court's 

instructions required the jury to evaluate the difference as of the time of purchase in 

2004.    A&M   Motors   also   points   out   that   there   was   documentary   evidence   that   was 

presented to the jury that inferentially showed only a $1,000 difference between the 

relevant model years as of the time of sale.  Counsel for A&M Motors so argued before 

the jury.    In addition, Borgen introduced the records showing both the amount A&M 

Motors   gave   the   Janidlos   for   trading   in   the   motor   home   and   the   amount   it   charged 

Borgen   for   the   vehicle.   In   our   view   the   testimony   of   Oyster   and   the   documentary 

evidence established a range of values on which the jury could have based its damages 

verdict.73   We therefore see no grounds for holding that the trial court should   have 

granted a judgment NOV or a new trial on damages. 

        73      See Dowling Supply & Equip., Inc. v. City of Anchorage , 490 P.2d 907, 909 

(Alaska 1971) (holding that "some competent evidence as to the amount of damages" 

must be introduced); Vlaskakis v. Ward, 1985 WL 1077652 (Alaska 1985) (holding that 

"[s]ince   the   damages   awarded   by   the   trial   court   are   within   the   range   of   evidence 

presented" award not clearly erroneous).           See also Conam Alaska v. Bell Lavalin, Inc., 

842 P.2d 148, 154 (Alaska 1992) (noting that "courts are more lenient in allowing the 

jury to speculate as to the amount of damages" after causation has been proven). 

                                                  -36-                                            6657

----------------------- Page 37-----------------------

                2.      Directed verdict for Morelli 

                With respect to Borgen's argument that the court erred in directing a verdict 

in favor of Morelli, Borgen argues that when the evidence is viewed in its strongest light 

in his favor, it creates a reasonable question for the jury as to whether Morelli was the 

person responsible for changing the sale documents concerning the motor home from 

"02" to "03."      But the trial court found that there was no evidence that Morelli was 

involved in this transaction apart from the fact that he was sales manager   of   A&M 

Motors at the time of the sale and was listed as such on some of the sales documents.74 

We agree with the trial court that viewing the evidence most favorably toward Borgen, 

Morelli's connection to the transaction was too tenuous to serve as a basis for imposing 

individual   liability   on   him   either   under   the   UTPA   or   on   a   theory   of   common   law 


        74      The court stated in ruling on the motion for directed verdict: 

                He's the desk manager on one document.             He's listed as the 

                sales manager on another document.  But there's no evidence 

                that   he   was   involved,   spoke   to   Mr.   Borgen.  Mr.   Borgen 

                didn't say I spoke to Mr. Morelli. . . .        There's no evidence 

                that he made any representations as to the year of the vehicle 

                . . . or knew what the year was of the vehicle. . . .  [T]he only 

                thing I've heard about Mr. Morelli throughout your case in 

                this matter is that Mr. Borgen thought he recognized him, had 

                seen him around . . . .       And I just haven't heard anything 

                about him saying anything, representing anything, misleading 

                anyone in any kind of way that I could attach - that I could 

                find a reasonable jury would attach liability to.          There's no 

                testimony about him being involved at all in this deal. 

        75      We note that under the Federal Trade Commission Act employee liability 

for misrepresentation is not as broad as corporate liability: 


                                                  -37-                                            6657

----------------------- Page 38-----------------------

                3.      Attorney's fees 

                Although Borgen's appellate point concerning the award of attorney's fees 

is moot, on remand the superior court must vacate the award of attorney's fees which it 

made to Borgen under Civil Rule 82 and make an award of full reasonable attorney's 

fees under subsection .537(a) of the UTPA. 


                The   special   verdict   established   that   Borgen   is   entitled   to   judgment   for 

misrepresentation under section .471 of the UTPA and that the actual damages that he 

suffered as a result of the misrepresentation were $3,097.50.  This sum must be trebled 

under AS 45.50.531(a).        In addition, Borgen is entitled to an award of full reasonable 

attorney's fees under AS 45.50.537(a).  No valid basis has been shown for reversing the 

judgment in favor of Morelli. 


                        An individual is obligated to make consumer redress 

                for violations of the FTC Act where he (1) participated in or 

                had the authority to control the wrongful acts or practices; 

                and    (2)  had   some    knowledge      of   the  wrongful     acts  or 

                practices.   FTC v. Gem Merchandising Corp ., 87 F.3d 466, 

                470 (11th Cir. 1996). To satisfy the knowledge requirement, 

                the   Commission       does   not  need    to  demonstrate     that  the 

                individual defendants possessed the intent to defraud, nor that 

                the     defendants        had     actual     knowledge        of    the 

                misrepresentations.  FTC v. Amy Travel Serv., Inc. , 875 F.2d 

                564, 574 (7th Cir. 1989).   "Reckless indifference to the truth 

                or falsity of the representations or an awareness of a high 

                probability of fraud coupled with an intentional avoidance of 

                the truth will suffice.   Moreover, a defendant's participation 

                in corporation affairs is probative of knowledge."  Id . 

F.T.C. v. SlimAmerica, Inc., 77 F. Supp. 2d. 1263, 1276 (S.D. Fla. 1999). 

                                                 -38-                                            6657

----------------------- Page 39-----------------------

             Accordingly, we AFFIRM the judgment in favor of Morelli, VACATE the 

judgment entered in favor of Borgen against A&M Motors, and REMAND this case with 

directions to enter a new judgment in favor of Borgen against A&M Motors under the 

UTPA and to award treble damages and attorney's fees in accordance with this opinion. 

                                         -39-                                   6657

Case Law
Statutes, Regs & Rules

IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights